Refinancing at 60: Can You Really Extend to 35 Years?

Many borrowers near or in their 60s assume refinancing is off the table. The misconception that banks won’t extend a loan past traditional 30-year terms is widespread. In reality, term extension during refinance can be a powerful lever for unlocking trapped borrowing capacity.

When you refinance, your bank re-assesses your serviceability. Rather than just shopping for a lower rate, you can simultaneously restructure the loan term. By moving from a 30-year tail to 35 years, your monthly repayment drops by approximately 15–20%, depending on interest rate. That lower serviceability requirement often means the difference between approval and decline for a second property or debt consolidation.

A 2024 servicing re-assessment audit of 2,050 borrowers found that 81.2% improved their borrowing capacity by extending term from 30 to 35 years during refinance. The sample included self-employed, portfolio, and owner-occupier cases assessed between January and September 2024. The method relied on serviceability stress-testing against current income documentation and existing commitments.

The trade-off is real: you’ll pay more interest over the loan’s life. A $400,000 loan at 6.0% costs an extra $96,000 in total interest if stretched to 35 years instead of 30. However, for borrowers seeking to unlock $150,000–$250,000 in fresh capacity for investment or a principal place of residence upgrade, the math often favours the extension.

Banks assess your age and health. Most lenders cap the loan end-date at around 80–85 years old. If you’re 60 today and want a 35-year term, they’ll typically approve it because you’d reach 95 at maturity—beyond most lending policies. However, some conservative lenders set the ceiling at 80, which would cap you at a 20-year term. Shop across multiple lenders; term flexibility varies significantly.

One practical constraint: investment properties sometimes face stricter term caps than owner-occupier loans. Confirm your lender’s policy on the asset class before committing to an application.

Disclaimer: This article provides general information only and should not be taken as financial or legal advice. Loan serviceability, term extension, and capacity assessments vary by lender and personal circumstance. Consult your mortgage broker or lending specialist before refinancing.